News Forum - Weakening baht is in focus as meeting called to discuss its impact

[Thaiger]

The Bank of Thailand is scrambling to find the sources behind the weakening baht as a meeting is called to discuss its impact. Finance Minister, Arkhom Termpittayapaisith, says the depreciating currency is adding to the inflationary pressures and is vowing to determine whether the decline is linked to the country’s economic fundaments. The Finance Ministry is set to hold talks with the Bank of Thailand to determine the cause of the baht’s decline. One contributing factor could be that of external forces, such as the strengthening US dollar.  “The currency’s value is affected by numerous factors and the ministry will […]

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[DoUKnowWhoIAm]

So the manipulation of the" Teflon bath" is finally failing? I hope it'll burn and we'll might just have a "Tom yam Kung 2.0" coming. Love it.

[EdwardV]

Arkhom says the Thai baht will adjust accordingly with the US Federal Reserve after it finishes increasing interest rates. But, he says the gap between the US and Thailand’s interest rates has not significantly affected capital outflows.

 

The US Fed just raised the rate .75 today and plan to keep raising rates through 2024. If the bank of Thailand is waiting till, it’s going to be a rough ride.
 

I don’t think that second statement is true.  

[Shade_Wilder]

Thailand’s Deputy Premier, Prawit Wongsuwon, reportedly advised the cabinet that something needed to be done to manage the baht, with Arkhom agreeing to investigate the matter. Prawit, however, didn’t have an answer as to whether he was seeking to regain a rate of 35 baht to the US dollar. 

“I used the word ‘should’ but authorities concerned will look into it and see what they can do."

Apropos of nothing whatsoever, making no judgements, seeking only clarity for clarity sake, asking for a friend, and out of deep respect for our Great General Prawit...

What currency are luxury watches traded in?

[Cabra]

1 hour ago, Thaiger said:

find the sources behind the weakening baht

They don't know.... Global recession fears. The baht has never been considered a safe place to put cash when there are unstable global economic conditions. 

 

[Cabra]

11 minutes ago, EdwardV said:

Arkhom says the Thai baht will adjust accordingly with the US Federal Reserve after it finishes increasing interest rates. But, he says the gap between the US and Thailand’s interest rates has not significantly affected capital outflows.

The US Fed just raised the rate .75 today and plan to keep raising rates through 2024. If the bank of Thailand is waiting till, it’s going to be a rough ride.
 

I don’t think that second statement is true.  

The consensus is the USD will appreciate another 2-3%. We are likely to see the baht at 38 by end of year. 

[palooka]

Two years of Covid and nearly zero tourism I think they are broke and the rest of the world knows it.

Thailand wants to boost tourism and one of the best ways is with a weak baht.  Thai tourism started as a cheap destination 10 million visitors in 1995 to a peak of over 63 million 2019.

The Mega rich aren't coming, sorry Pnut, so they have to go back to basics and a system that works.

[Wackamole]

Not sure if THB is weakening much against anything but USD.

[TSS]

the wealthy never have or will visit in great numbers. The boomer gen. that put this place on the map as far as tourism, for the most part, are now ageing stay at homers. An era has passed. The Thai people and the country remain spectacular. But don't count on anywhere close to the visitor numbers pre 2020.

[DoUKnowWhoIAm]

4 minutes ago, TSS said:

the wealthy never have or will visit in great numbers. The boomer gen. that put this place on the map as far as tourism, for the most part, are now ageing stay at homers. An era has passed. The Thai people and the country remain spectacular. But don't count on anywhere close to the visitor numbers pre 2020.

The problem with Thailand is that it's totally empty when you scratch on the surface. Like the 1000s of retired skandinavians who came here on a 2 week vaccation, fell in love in the beaches and the smiles and bought houses in Huahin. But after 6months -  a year, you've  been to the beaches and temples, there's nothing more to do. Many have moved back to Europe, like Portugal,  much more culture and history and easy to travel around.

[Janneman]

2 hours ago, Thaiger said:

One contributing factor could be that of external forces, such as the strengthening US dollar. 

This is not one factor, this is THE factor. The dollar is strengthening against most other currencies. Including the euro.

It is actually good for Thailand as it gets easier to export goods. As the payment is in dollars there will automatically be an increase of bahts in the economy. Thus the internal economy gets a boost. Importing goods becomes more expensive. That's the downside.

The only thing to fear are the measures the Thai national bank might take. They can either raise interest rates which slows down the economy. Or they can start intervening by buying dollars, with the idea that this will strengthen the baht. It works, for 2 or 3 days, and make a few investors very rich.

Both measures are very bad. Best they can do is nothing. And since they have some extremely competent economists in the national bank I'm sure, ummm, well... 'God the baht is dropping! We gotta do something to save our country!' 

[yselmike]

1 hour ago, TSS said:

the wealthy never have or will visit in great numbers. The boomer gen. that put this place on the map as far as tourism, for the most part, are now ageing stay at homers. An era has passed. The Thai people and the country remain spectacular. But don't count on anywhere close to the visitor numbers pre 2020.

With India and china a short flight away they will have no problem getting the numbers up, once restrictions are lifted.They may not be big spenders like the much derided two week millionaires but they will make the tourist minister very happy.

[Thai3rdworld]

Hilarious how Thai brains are puzzled whe. Their over inflated BAHT isn't strong against another currency ..like a lot of other things in the country...over rated 

[Skip]

The baht has not been pegged to the US dollar since July 2, 1997.

The Thai baht is stagnant only because the USD is getting stronger... let it run it's course without interference by the banks and all will be well